December natural gas futures in their second regular session as the front-month contract on Friday continued to navigate rudderless — trading above and below Thursday’s settle before closing almost unchanged for a second straight session.

Early in the session it appeared that bulls were firmly in control as the prompt-month contract ran up to reach a $5.271 high before 10 a.m. EDT. However, values sunk from there, recording a $4.952 low in afternoon trading before closing the regular session at $5.045, down 1.7 cents from Thursday’s finish.

“Things are pretty weak in the futures market, but I am not all that surprised,” said Steve Blair, a broker with Rafferty Technical Research in New York. “The storage picture is pretty brutal, and one guy I talked to Friday said he believes we could see a 40 Bcf injection in the next report. Temperatures have been pretty mild, so an injection of that size is not out of the question. New York was in the high 50s to low 60s, so there is not a lot of demand being generated from those type of temperatures.”

By ignoring fundamentals, Blair said, gas futures are pretty difficult to navigate right now. “I think the December contract is having some trouble with some minor support around $5 and $4.900. Major support comes in around $4.600 and then $4.380. On paper it looks like the bulls would have a hard time finding some traction given the storage situation and the weather, but if people cared that much about the storage situation in the first place we never would have gotten to $5, so we’re currently in a strange and wild market.

“This muddies the price forecast going forward. The only real question is when the cold temperatures set in. That could really lend some clarity to traders. Until that, I think we’re just bouncing around a little aimlessly.”

Analysts are also looking for near-term temperature forecasts to steer futures prices in the next couple of weeks. “We will look for updates to the short-term temperature forecasts to generally guide pricing as this market exits the shoulder season,” said Jim Ritterbusch of Ritterbusch and Associates. He added that the forecasts are currently “skewed heavily in the direction of above-normal temps across a broad swath of the nation’s Midcontinent during the next couple of weeks.” As Ritterbusch sees it, the forecasts need to shift back to the cold side in order to prevent the market from sliding back down below $5.

Near-term weather forecasts have something for both the bulls and the bears. Forecaster WSI Corp. of Andover, MA, in its six- to 10-day outlook predicts warmer-than-normal temperatures over the interior western and central United States. Anomalies as warm as 8 degrees above normal are anticipated over the north-central U.S. and cooler-than-normal readings are expected to linger along the East Coast.

WSI cautions that there are risks to the forecast and that temperatures may trend colder along the Eastern Seaboard than currently forecast. “While all models advertise the Pacific Oscillations will transition to phases favorable for warm weather in the middle of the country, they also advertise the AO [Atlantic Oscillation] remain[ing] in negative phase in early November,” the forecasting firm said, noting that all models depict a redeveloping eastern trough in early November.

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